One of the best ways to develop a picture of any company is with the SWOT analysis -- a look at a company's strengths, weaknesses, opportunities, and threats. Today, I'd like to focus on Intuitive Surgical (Nasdaq: ISRG), the surgical robot pioneer that has become one of my favorite public businesses.


  • High barriers to entry: Intuitive Surgical has more than 650 U.S. and foreign patents as well as Food and Drug Administration approvals
  • Brand strength -- da Vinci robots known among patients
  • Near-monopoly in robot-assisted surgeries
  • High switching costs: Machines are expensive and not easily replaceable; doctors trained on-site and at nationwide Intuitive Surgical training centers


  • Big-ticket purchases make for a long sales and purchase order cycle: cash slow to come in after sale
  • Manufacturing these robots is complex and somewhat costly
  • Long-term growth heavily reliant on research and development successes and ability to keep top talent


  • Global growth: Of 1,482 da Vinci systems in use, 74% are in the U.S.
  • Domestic growth opportunities abound, too: Of 5,800 hospitals in the U.S., there are da Vinci robots in fewer than 1,000.
  • Procedure growth: Robots are used in cardiothoracic, gynecological, and urological surgeries, but there are many more possible applications.


  • If a robot has a defect, significant legal liability and brand/reputational risk
  • The health-care industry is heavily regulated
  • Imitators: Intuitive Surgical is the first-mover and in 2003 bought its largest competitor, but the threat of cheaper imitator technologies is real.
  • Competition from lower-cost pharmaceuticals that achieve what only surgery can today.
  • Payment comes from third-party payers. Intuitive Surgical customers are hospitals; hospitals get paid by health insurers.

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Brian Richards is online managing editor of The Motley Fool. Brian does not own shares of Intuitive Surgical, which is a Rule Breakers recommendation. Read about the Fool's disclosure policy here.